Press Release

January ’18 Message from the CEO

Happy 2018 everyone! I hope the New Year has started off well for all of you.

I wanted to update you on how the health center is progressing this fiscal year. This current fiscal year is the health center’s most challenging in many years. The organization has been impacted by the decline in payment due to Managed Care Medicaid in the state of Iowa, a shift in seeing more governmental payer patients as well as a decrease in utilization. HCHC is not alone in feeling this impact. Throughout the state, other Iowa Critical Access Hospitals (CAH) are having similar financial constraints. On average, Iowa CAHs have a negative operating margin.

One of the items the health center and the board of trustees is looking at for this next fiscal year is to increase the tax levy support for the organization. There are 42 county hospitals in the state of Iowa that levy tax dollars for the support of the local hospital. Of those 42, 41 are very similar to HCHC. The largest is Broadlawns in Polk County. Over the years, HCHC has received lower tax support in comparison to the other county hospitals in the state. This current fiscal year, the health center is receiving $943,010 with a tax levy rate of 1.17050. At this current level, HCHC is number 28 out of 41 for tax levy rate, and is number 33 out of 41 for total dollars levied. This means there are currently 27 other county hospitals that have a higher tax levy rate and 32 other county hospitals that are receiving more property tax dollars for support.

We have been working hard throughout the organization to decrease our operational costs for the services we provide. In July of 2017, we set a goal to reduce our operating expenses by 10% by June 2018. We have made progress towards that 10%. We are approaching a 5% reduction now after four months of work. Our leaders and associates are continuing to review and make changes to help reduce our operating costs as able. In addition, we are strategically examining new possibilities to enhance access to the services HCHC provides by planning for implementation of Rural Health Clinics for HCHC as well as outpatient pharmacy initiatives. Leadership and the Board of Trustees are reviewing the strategic plan which was approved this past summer and utilizing this document, and work to guide the planning.

In order to help improve the health center’s current financial position, the expectation of another cost increase from the IPERS program, and with the continued reduction of payments from the Iowa Managed Care Medicaid Organizations, HCHC’s administration did recommend to the Board of Trustees at the January 2018 meeting a property tax levy increase for the health center from 1.17050 to 1.61865 for the following fiscal year. If the health center’s tax levy stays the same, there would be an increase of the tax dollars from $943,008 to $992,810 due to the increase of valuations in the county. If the board of trustees votes to increase the health center’s tax levy to the proposed rate, it will generate an additional $380,115 for the health center. For homeowners, the increase in the tax levy will result in approximately $25 of increase tax per year on a home that has an assessed value of $100,000. The board of trustees will have a public hearing at noon on February 20, 2018, and will then address the tax levy at that meeting for the upcoming fiscal year.

I would like to also take this time to recognize and congratulate Mark Hempen, HCHC Foundation Director, as one of the Co-Ambassadors of the Year for 2017 for the Mt. Pleasant Chamber of Commerce. Mark does a great job of leading the HCHC Foundation and has played an active role in our community by being an Ambassador. Great job Mark, and thanks for giving back to our community!

Thanks again for taking the time to read our e-newsletter. Please make sure to look at the current e-newsletter to review the different events that will be occurring here at the health center that you may find benefit from. As always, I hope you find it informative and helpful for your health care. If you should happen to have any questions, please feel free to contact Shelley Doak or myself and we will be happy to follow up with you.